Zhongchang International Ld : ANNOUNCEMENT IN RELATION TO THE ENFORCEMENT OF SECURITY OVER CONVERTIBLE NOTE HELD BY THE CONTROLLING SHAREHOLDER

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ZHONGCHANG INTERNATIONAL HOLDINGS GROUP LIMITED

中 昌 國 際 控 股 集 團 有 限 公 司

(incorporated in Bermuda with limited liability)

(Stock code: 859)

ANNOUNCEMENT IN RELATION TO

THE ENFORCEMENT OF SECURITY OVER CONVERTIBLE NOTE

HELD BY THE CONTROLLING SHAREHOLDER

Reference is made to the announcement of Zhongchang International Holdings Group Limited (the "Company") dated 24 October 2019 in relation to, among others, the enforcement of charge over shares of the Company held by the controlling shareholder (the "Announcement"). Unless the context requires otherwise, capitalised terms used herein shall have the same meaning as set out in the Announcement.

As disclosed in the Announcement, the Convertible Note with outstanding principal amount of HK$11,000,000 is subject to security interest under the Finance Documents. The Company received a notice of enforcement dated 31 December 2019 from the Security Agent that due to the occurrence of an event of default under the Finance Documents, with effect from the date of the enforcement notice, (i) all of Sansheng Hongye's rights and remedies under or in respect of the Convertible Note should become exercisable by the Security Agent only, (ii) all rights to compel performance of the Convertible Note shall be exercisable by the Security Agent although Sansheng Hongye shall remain solely liable to perform all the obligations assumed by it under the Convertible Note, and (iii) the Company shall pay all amounts payable by the Company under or in respect of the Convertible Note to the Security Agent or as the Security Agent may specify from time to time. The Convertible Note is unsecured, bears interest at the rate of 1.68% per annum on the outstanding principal amount and is convertible into 13,715,710 new shares of the Company at the prevailing conversion price of HK$0.802 per new share. Interest shall accrue from the issue date of the Convertible Note on 7 December 2015 and shall be payable by the Company (together with the outstanding principal amount) on the maturity date of 7 December 2020.

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Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board of

Zhongchang International Holdings Group Limited

Fan Xuerui

Chairman and Executive Director

Hong Kong, 2 January 2020

As at the date of this announcement, the board of directors of the Company comprises Mr. Fan Xuerui (Chairman), Mr. Pi Minjie, Mr. Sun Meng and Ms. Li Guang as executive directors; Mr. Wang Xin as non-executive director; and Mr. Hung Ka Hai Clement, Mr. Liew Fui Kiang and Mr. Wong Sai Tat as independent non-executive directors.

The directors of the Company jointly and severally accept full responsibility for accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

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